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We've all been told that a requirement of success now is a four-year college degree, at the very minimum. But Peter Thiel disagrees. That idea, says the PayPal co-founder, is so 20th century, that the self-made billionaire plans to award cash grants of $100,000 to college students -- if they'll drop out of school.

At a tech conference in October, Thiel announced a two-year program called "20 Under 20" that will grant $100,000 to 20 aspiring entrepreneurs under the age of 20. In addition to the cash, the two-year program offers mentoring, training and employment opportunities with Thiel's personal network of tech entrepreneurs, venture capitalists and philanthropists. Deadline to apply is Dec. 31, and fellows will be announced in early 2011.
Why drop out of college, much less an Ivy League school, for this? Elon Musk, a college dropout who founded PayPal with Thiel and now runs electric carmaker Tesla Motors and rocketship venture Space X, said this in a press release: "University is a tremendously valuable experience, but when entrepreneurs are ready to launch, they should do so immediately, rather than sticking around to satisfy expectations of a full four years of college or eight of grad school."

Also consider the examples of college-dropouts-turned-billionaires like Bill Gates of Microsoft, Michael Dell of Dell Computer, Larry Ellison of Oracle, and the latest wunderkind, Mark Zuckerberg, who at 19 got $500,000 from Thiel for a little Internet venture called Facebook.

Money College spoke with Jonathan Cain, president of the Thain Foundation, about the "20 Under 20" fellowship and why college students should consider giving up school for it.

Q: How will the "20 Under 20" fellowship be structured?

The fellowship is two years. Those we select as fellows can start it any time in 2011; you can decide to finish the spring semester and take a leave of absence, or start right away. How the fellowship is structured is fluid -- it will depend on that person's needs and what he's interested in, what field she's in, and the day-to-day schedule he wants to do.

Some fellows may have a great idea for a company and want to dive right in and work on building that. Some might want to start on getting investors. Others might actually want to do a deep literature review for whatever their idea is, like the two founders of a company Peter recently funded. They left the University of Arizona when they were 18, 19 and spent two years reading all the science literature they could find that was related to their idea. That helped them to create their company, Halcyon Molecular. So some might follow that model and spend their time reading science papers and talking with scientists. Others may benefit from interning at startups to see how they work. Whatever stage they're at, we can open doors and connect them with the right people."

Q: Who are the people you can connect them with?

A: Some have reached out to us, offering to help as mentors, but who we end up connecting them to will really depend a lot on the fellows' interests. Peter and his partners at the venture capital firm Founders Fund have all invested in and worked with dozens of companies over the years. Most are focused in California and Silicon Valley, so that's the network we predominantly work from. Broadly speaking, we do work with consumer Internet companies. But we also work with nonprofits, and we have reach in biotech, engineering, biophysics and astrophysics.

Q. What type of person should apply for this fellowship?

A. Certainly, we have a bias toward those interested in tech and entrepreneurship. But we have a particular emphasis on how passionate they are about how they want to change the world, and how differently they think about the world.

They don't necessarily have to make a change in the U.S. Someone could have an idea for, say, a hydro-powered electricity generator to develop or sell in Africa or someplace where it can make a difference. Or she may want to launch a charity to do something else entirely. We're looking for someone who has a new, different idea that hasn't been done before, and is enthusiastic, passionate and focused. Overall, we're looking more at people than at ideas when we select the fellows.

Q. How is this fellowship going to help someone more than a four-year degree at Harvard or Stanford could?

A. For a lot of people and some fields, college is definitely the right place, especially if you're studying in fields like law, medicine, academia. But for other people, college is mostly about getting a credential that feels necessary to get a job. But you could end up alongside millions of people who are overqualified and over-educated for the work they actually do, not to mention all the college grads who are unemployed right now. Combine that with the tremendous amounts of debt some are racking up to get that degree.

There may be some things you don't need a degree to do, like starting a business. College may not be the best place to teach you that. Servicing six figures of debt constrains the kind of things you want to do. If you're wanting to take a big risk and try something new, it's a lot easier to do if you don't have debt.